Wellness Programs: Do They Really Impact the Bottom Line?

Mark Crawford
January 19, 2010 | COMMENTS

Health-improvement or wellness programs have long been advocated as a way to contain health-care costs by improving employee health. However, few companies really know how much money these various programs are actually saving them, according to a survey conducted by Fidelity Investments and the National Business Group on Health.

Companies can choose from a variety of wellness services, ranging from on-site flu shots and blood pressure screenings to nurse hotlines, disease-management programs, addiction programs, on-site seminars, and gym memberships.

Only 40% of the respondents indicated they aggregate ROI across all the wellness programs their employees use. “Furthermore, only 19% of companies are accurately capturing the costs of such programs, while 62% are underestimating the amount they spend, according to independent estimates calculated by Fidelity,” writes Alix Stuart on CFO.com. Reasons for this include the inherent difficulty in accurately measuring health-care outcomes, the use of multiple programs with multiple vendors, and the longer timelines needed to determine measurable results.

Of the 40% of companies that do track ROI across all programs, about half say they see a two-to-one return on their investment, indicates Stuart. About 25% see greater returns, while the other quarter says they are just breaking even or even losing money.

“What CFOs can do, short of obtaining precise dollar-denominated ROIs, is take an inventory of all the programs they currently have, and consider the current cost and benefits they carry,” says Stuart.

If ROI and participation rates aren't as high as companies would like, here is a final piece of advice from Stuart: “It doesn't hurt for a CFO to join a fitness challenge or submit to a cholesterol test at a health fair, says Stuart. “Executives are both role models and champions. They can drive a lot in the company if they choose to, and there are very real benefits to that.”

Read Alix Stuart's complete article online here.